Results and dividend The unaudited net asset value (NAV) per share at 30 September 2017 was 68.4 pence (76.6 pence (audited) at 31 March 2017). This is after deducting the second interim and final dividends totalling 8.5 pence per share in respect of the 2016/17 financial year which were paid in July 2017. The board declared the second interim dividend due to the strong inflow of cash from investment realisations during the year to 31 March 2017. Shareholders may recall that the VCT rules permit only six months for re-investment of such receipts, before they become non-qualifying if retained by the company.

The return per share as shown in the income statement for the six months ended 30 September 2017 was 0.4 pence, compared with 8.0 pence in the corresponding period last year. This reflects a lower contribution from investment revaluations and realisations during the particular period under review.

The board has declared an unchanged interim dividend for the year ending 31 March 2017 of 2.0 pence per share, which will be paid on 26 January 2018 to shareholders on the register on 5 January 2018.

PortfolioFour new holdings in VCT-qualifying companies were acquired for a total consideration of £2.7 million:

In addition, a follow-on investment of £812,000 was made during the period in Sorted Holdings (previously Myparceldelivery Holdings), an existing investee company.

Since 30 September 2017, two new investments have been completed, in Angle, an AIM-quoted medical diagnostics provider of £134,000, and Soda Software Labs, a data analytics specialist of £1,332,000.

Proceeds of £5.9 million were received from investment sales and repayments, resulting in a realised gain of £0.7 million over the 31 March 2017 carrying values. Optilan Group was sold to Blue Water Energy by way of a secondary buyout transaction, generating proceeds for Northern 2 VCT of £2.2 million. A further £2.5 million was returned from five holding companies, which had been seeking a VCT qualifying trade but which were ultimately unable to do so. In the AIM-quoted portfolio, the remaining investment in Gear4music (Holdings) was sold for over three times the original cost.

As shareholders will appreciate, the composition of the portfolio is gradually changing with an increasing proportion of funds invested in earlier stage investment opportunities, as required by the current VCT regulations.

Share issues and buy-backs Based on the expected investment rate in the coming years both for new investments and follow-on funding rounds in early stage investee companies, we announced a prospectus share offer in September 2017 to raise up to £20 million. We are very pleased that strong demand was experienced for this offer and on 8 November 2017 we announced that it was fully subscribed. Priority was given to existing shareholders for a period of 21 days. All applications received during that period were satisfied in full. I would like to thank all applicants for their support in acquiring shares and believe that our company is well placed to take advantage of attractive investment opportunities as they arise.

Whilst the company has maintained its policy of buying back its own shares in the market at a discount of 5% to NAV from time to time, there were no repurchases during the period under review.

VCT qualifying status The company has continued to meet the stringent qualifying conditions laid down by HM Revenue & Customs for maintaining its approval as a VCT. Our investment manager, NVM, monitors the position closely and reports regularly to the board. Philip Hare & Associates LLP has continued to act as independent adviser to the company on VCT taxation matters.

VCT legislation Having operated under the current iteration of the VCT rules for the last two years, our manager NVM has continued to adapt its approach to maintain ongoing compliance and has also continued to strengthen and supplement its team of early stage investment professionals.

We have closely monitored the Government's Patient Capital Review, established to consider the availability of long-term finance for growing firms. In conjunction with NVM, we have continued to champion the work of the VCT industry and to highlight the considerable contribution that the sector makes in supporting small and medium-sized businesses. We await with interest the detail of the Chancellor's Budget announcement on 22 November 2017, to understand whether it will provide any clarity as to the future legislative landscape for the VCT sector.

Prospects In recent times we have operated against a background of political uncertainty and that looks set to continue as the long-term impact of the UK's decision to leave the EU unfolds. That notwithstanding, our manager continues to identify an encouraging pipeline of investment opportunities and we have confidence in the potential of our investment approach to produce good returns for shareholders in the future.

On behalf of the Board

David GravellsChairman

The unaudited half-yearly financial statements for the six months ended 30 September 2017 are set out below.

INCOME STATEMENT(unaudited) for the six months ended 30 September 2017

Six months ended30 September 2017

Six months ended30 September 2016

Revenue £000

Capital £000

Total £000

Revenue £000

Capital £000

Total £000

Gain on disposal of investments

-

376

376

-

562

562

Movements in fair value of investments

-

(560)

(560)

-

6,613

6,613

----------

----------

----------

----------

----------

----------

-

(184)

(184)

-

7,175

7,175

Income

1,526

-

1,526

1,181

-

1,181

Investment management fee

(195)

(586)

(781)

(184)

(551)

(735)

Other expenses

(187)

-

(187)

(183)

-

(183)

----------

----------

----------

----------

----------

----------

Return on ordinary activities before tax

1,144

(770)

374

814

6,624

7,438

Tax on return on ordinary activities

(186)

186

-

(130)

130

-

----------

----------

----------

----------

----------

----------

Return on ordinary activities after tax

958

(584)

374

684

6,754

7,438

----------

----------

----------

----------

----------

----------

Return per share

1.0p

(0.6)p

0.4p

0.7p

7.3p

8.0p

Year ended 31 March 2017

Revenue £000

Capital £000

Total £000

Gain on disposal of investments

-

2,285

2,285

Movements in fair value of investments

-

6,189

6,189

----------

----------

----------

-

8,474

8,474

Income

2,556

-

2,556

Investment management fee

(370)

(1,681)

(2,051)

Other expenses

(364)

-

(364)

----------

----------

----------

Return on ordinary activities before tax

1,822

6,793

8,615

Tax on return on ordinary activities

(313)

313

-

----------

----------

----------

Return on ordinary activities after tax

1,509

7,106

8,615

----------

----------

----------

Return per share

1.6p

7.7p

9.3p

BALANCE SHEET(unaudited) as at 30 September 2017

30 September 2017 £000

30 September 2016 £000

31 March 2017 £000

Fixed assets:

Investments

55,220

64,796

58,195

----------

----------

----------

Current assets:

Debtors

638

269

591

Cash and cash equivalents

13,590

7,288

17,874

----------

----------

----------

14,228

7,557

18,465

Creditors (amounts falling due

within one year)

(100)

(135)

(5,013)

----------

----------

----------

Net current assets

14,128

7,422

13,452

----------

----------

----------

Net assets

69,348

72,218

71,647

----------

----------

----------

Capital and reserves:

Called-up equity share capital

5,070

4,670

4,678

Share premium

8,390

2,744

3,029

Capital redemption reserve

83

70

83

Capital reserve

47,028

53,794

53,908

Revaluation reserve

7,415

9,932

9,049

Revenue reserve

1,362

1,008

900

----------

----------

----------

Total equity shareholders' funds

69,348

72,218

71,647

----------

----------

----------

Net asset value per share

68.4p

77.3p

76.6p

STATEMENT OF CHANGES IN EQUITY(unaudited) for the six months ended 30 September 2017

-----------------Non-distributable reserves-----------------

Distributable reserves

Total

Share capital

Share premium

Capital redemption reserve

Revaluation reserve

Capital reserve

Revenue reserve

£000

£000

£000

£000

£000

£000

£000

At 1 April 2017

4,678

3,029

83

9,049

53,908

900

71,647

Return on ordinary activities

after tax for the period

-

-

-

(1,634)

1,050

958

374

Dividends paid

-

-

-

-

(7,930)

(496)

(8,426)

Net proceeds of share issues

392

5,361

-

-

-

-

5,753

----------

----------

----------

----------

----------

----------

----------

At 30 September 2017

5,070

8,390

83

7,415

47,028

1,362

69,348

----------

----------

----------

----------

----------

----------

----------

STATEMENT OF CHANGES IN EQUITY(unaudited) for the six months ended 30 September 2016

-----------------Non-distributable reserves-----------------

Distributable reserves

Total

Share capital

Share premium

Capital redemption reserve

Revaluation reserve

Capital reserve

Revenue reserve

£000

£000

£000

£000

£000

£000

£000

At 1 April 2016

4,580

1,464

59

5,562

58,614

1,058

71,337

Return on ordinary activities

after tax for the period

-

-

-

4,370

2,384

684

7,438

Dividends paid

-

-

-

-

(7,054)

(734)

(7,788)

Net proceeds of share issues

101

1,280

-

-

-

-

1,381

Shares re-purchased

for cancellation

(11)

-

11

-

(150)

-

(150)

----------

----------

----------

----------

----------

----------

----------

At 30 September 2016

4,670

2,744

70

9,932

53,794

1,008

72,218

----------

----------

----------

----------

----------

----------

----------

STATEMENT OF CHANGES IN EQUITYfor the year ended 31 March 2017

-----------------Non-distributable reserves-----------------

Distributable reserves

Total

Share capital

Share premium

Capital redemption reserve

Revaluation reserve

Capital reserve

Revenue reserve

£000

£000

£000

£000

£000

£000

£000

At 1 April 2016

4,580

1,464

59

5,562

58,614

1,058

71,337

Return on ordinary activities

after tax for the period

-

-

-

3,487

3,619

1,509

8,615

Dividends paid

-

-

-

-

(7,987)

(1,667)

(9,654)

Net proceeds of share issues

122

1,565

-

-

-

-

1,687

Shares re-purchased

for cancellation

(24)

-

24

-

(338)

-

(338)

----------

----------

----------

----------

----------

----------

----------

At 31 March 2017

4,678

3,029

83

9,049

53,908

900

71,647

----------

----------

----------

----------

----------

----------

----------

STATEMENT OF CASH FLOWS(unaudited) for the six months ended 30 September 2017

Six months ended

Six months ended

Year ended

30 September 2017

30 September 2016

31 March 2017

£000

£000

£000

Cash flows from operating activities:

Return on ordinary activities before tax

374

7,438

8,615

Adjustments for:

Gain on disposal of investments

(376)

(562)

(2,285)

Movement in fair value of investments

560

(6,613)

(6,189)

(Increase)/decrease in debtors

(47)

1

(321)

Increase/(decrease) in creditors

(616)

(409)

172

----------

----------

----------

Net cash outflow from operating activities

(105)

(145)

(8)

----------

----------

----------

Cash flows from investing activities:

Purchase of investments

(3,716)

(5,103)

(6,082)

Sale/repayment of investments

6,507

4,478

13,358

----------

----------

----------

Net cash inflow/(outflow) from investing activities

2,791

(625)

7,276

----------

----------

----------

Cash flows from financing activities:

Issue of ordinary shares

5,842

1,397

1,717

Share issue expenses

(89)

(15)

(30)

Share subscriptions held pending allotment

(4,297)

-

4,297

Repurchase of ordinary shares for cancellation

-

(150)

(338)

Dividends paid on ordinary shares

(8,426)

(7,788)

(9,654)

----------

----------

----------

Net cash outflow from financing activities

(6,970)

(6,556)

(4,008)

----------

----------

----------

Net increase/(decrease) in

cash and cash equivalents

(4,284)

(7,326)

3,260

Cash and cash equivalents at beginning of period

17,874

14,614

14,614

----------

----------

----------

Cash and cash equivalents at end of period

13,590

7,288

17,874

----------

----------

----------

INVESTMENT PORTFOLIO SUMMARYas at 30 September 2017

Company

Cost£000

Valuation£000

% of net assetsby valuation

Fifteen largest venture capital investments:

No 1 Lounges

1,977

3,850

5.6

Entertainment Magpie Group

1,503

3,501

5.1

Buoyant Upholstery

1,508

2,941

4.2

MSQ Partners Group

1,672

2,596

3.7

Sorted Holdings

1,625

2,535

3.7

Lineup Systems

974

2,468

3.6

Wear Inns

1,868

2,113

3.1

Agilitas IT Holdings

1,638

1,951

2.8

Biological Preparations Group

2,166

1,891

2.7

Closerstill Group

1,683

1,837

2.6

It's All Good

1,145

1,668

2.4

Volumatic Holdings

1,423

1,555

2.2

Love Saving Group

1,124

1,546

2.2

Graza

1,522

1,522

2.2

Intuitive Holding

1,508

1,352

2.0

----------

----------

-------

23,336

33,326

48.1

Other venture capital investments

16,953

13,954

20.1

----------

----------

-------

Total venture capital investments

40,289

47,280

68.2

Listed equity investments

3,644

4,157

6.0

Listed fixed-interest investments

3,872

3,783

5.4

----------

----------

-------

Total fixed asset investments

47,805

55,220

79.6

----------

Net current assets

14,128

20.4

----------

-------

Net assets

69,348

100.0

----------

-------

BUSINESS RISKS

The board carries out a regular and robust review of the risk environment in which the company operates. The principal risks and uncertainties identified by the board which might affect the company's business model and future performance, and the steps taken with a view to their mitigation, are as follows:

Investment and liquidity risk: investment in smaller and unquoted companies, such as those in which the company invests, involves a higher degree of risk than investment in larger listed companies because they generally have limited product lines, markets and financial resources and may be more dependent on their management or key individuals. The securities of smaller companies in which the company invests are typically unlisted, making them illiquid, and this may cause difficulties in valuing and disposing of the securities. The company may invest in businesses whose shares are quoted on AIM - the fact that a share is quoted on AIM does not mean that it can be readily traded and the spread between the buying and selling prices of such shares may be wide. Mitigation: the directors aim to limit the risk attaching to the portfolio as a whole by careful selection, close monitoring and timely realisation of investments, by carrying out rigorous due diligence procedures and maintaining a wide spread of holdings in terms of financing stage and industry sector. The board reviews the investment portfolio with the investment manager on a regular basis.

Financial risk: most of the company's investments involve a medium- to long-term commitment and many are relatively illiquid. Mitigation: the directors consider that it is inappropriate to finance the company's activities through borrowing except on an occasional short-term basis. Accordingly they seek to maintain a proportion of the company's assets in cash or cash equivalents in order to be in a position to take advantage of new unquoted investment opportunities. The company has very little direct exposure to foreign currency risk and does not enter into derivative transactions.

Economic risk: events such as economic recession or general fluctuation in stock markets and interest rates may affect the valuation of investee companies and their ability to access adequate financial resources, as well as affecting the company's own share price and discount to net asset value. Mitigation: the company invests in a diversified portfolio of investments spanning various industry sectors, and maintains sufficient cash reserves to be able to provide additional funding to investee companies where appropriate.

Stock market risk: some of the company's investments are quoted on the London Stock Exchange or AIM and will be subject to market fluctuations upwards and downwards. External factors such as terrorist activity can negatively impact stock markets worldwide. In times of adverse sentiment there may be very little, if any, market demand for shares in smaller companies quoted on AIM. Mitigation: the company's quoted investments are actively managed by specialist advisers and the board keeps the portfolio under ongoing review.

Credit risk: the company holds a number of financial instruments and cash deposits and is dependent on the counterparties discharging their commitment. Mitigation: the directors review the creditworthiness of the counterparties to these instruments and cash deposits and seek to ensure there is no undue concentration of credit risk with any one party.

Legislative and regulatory risk: in order to maintain its approval as a VCT, the company is required to comply with current VCT legislation in the UK, which reflects the European Commission's State aid rules. Changes to the UK legislation or the State aid rules in the future could have an adverse effect on the company's ability to achieve satisfactory investment returns whilst retaining its VCT approval. Mitigation: The board and the investment manager monitor political developments and where appropriate seek to make representations either directly or through relevant trade bodies.

Internal control risk: the company's assets could be at risk in the absence of an appropriate internal control regime. Mitigation: the board regularly reviews the system of internal controls, both financial and non-financial, operated by the company and the investment manager. These include controls designed to ensure that the company's assets are safeguarded and that proper accounting records are maintained.

VCT qualifying status risk: While it is the intention of the directors that the company will be managed so as to continue to qualify as a VCT, there can be no guarantee that this status will be maintained. A failure to continue meeting the qualifying requirements could result in the loss of VCT tax relief, the company losing its exemption from corporation tax on capital gains, to shareholders being liable to pay income tax on dividends received from the company and, in certain circumstances, to shareholders being required to repay the initial income tax relief on their investment. Mitigation: the investment manager keeps the company's VCT qualifying status under continual review and its reports are reviewed by the board on a quarterly basis. The board has also retained Philip Hare & Associates LLP to undertake an independent VCT status monitoring role.

OTHER MATTERS

The unaudited half-yearly financial statements for the six months ended 30 September 2017 do not constitute statutory financial statements within the meaning of Section 434 of the Companies Act 2006, have not been reviewed or audited by the company's independent auditor and have not been delivered to the Registrar of Companies. The comparative figures for the year ended 31 March 2017 have been extracted from the audited financial statements for that year, which have been delivered to the Registrar of Companies. The auditor's report on those financial statements (i) was unqualified, (ii) did not include any reference to matters to which the auditor drew attention by way of emphasis without qualifying the report and (iii) did not contain a statement under Section 498(2) or (3) of the Companies Act 2006. The half-yearly financial statements have been prepared on the basis of the accounting policies set out in the annual financial statements for the year ended 31 March 2017.

Each of the directors confirms that to the best of his or her knowledge the half-yearly financial statements have been prepared in accordance with the Statement "Half-yearly financial reports" issued by the UK Accounting Standards Board and the half-yearly financial report includes a fair review of the information required by (a) DTR 4.2.7R of the Disclosure Rules and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the year, and (b) DTR 4.2.8R of the Disclosure Rules and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period, and any changes in the related party transactions described in the last annual report that could do so.

The directors of the company at the date of this statement were Mr D P A Gravells (Chairman), Mr A M Conn, Mr S P Devonshire, Miss C A McAnulty and Mr F L G Neale.

The calculation of the revenue and capital return per share is based on the return on ordinary activities after tax for the period and on 99,880,309 (2016 92,387,450) ordinary shares, being the weighted average number of shares in issue during the period.

The calculation of the net asset value per share is based on the net assets at 30 September 2017 divided by the 101,400,355 (2016 93,394,459) ordinary shares in issue at that date.

The interim dividend of 2.0 pence per share for the year ending 31 March 2018 will be paid on 26 January 2018 to shareholders on the register at the close of business on 5 January 2018.

A copy of the half-yearly financial report for the six months ended 30 September 2017 is expected to be posted to shareholders by 24 November 2017 and will be available to the public at the registered office of the company at Time Central, 32 Gallowgate, Newcastle upon Tyne NE1 4SN and on the NVM Private Equity LLP website, www.nvm.co.uk.

Neither the contents of the NVM Private Equity LLP website nor the contents of any website accessible from hyperlinks on the NVM Private Equity LLP website (or any other website) is incorporated into, or forms part of, this announcement.

This announcement is distributed by Nasdaq Corporate Solutions on behalf of Nasdaq Corporate Solutions clients.The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.Source: Northern 2 VCT PLC via Globenewswire

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